DCR Workforce April 2013 Trendline Report

REPORT # 14 | April 2013

TRENDLINE
Contingent Worker Forecast and Supply Report

Inside this Issue

Note from the Editor 1 Note from the Editor
DCR National Temp Wage Index 2 As we jump into spring and the second quarter of the year, TrendLine this month once again
provides you with key insights into the temporary staffing industry. With new groundbreaking
Elderly Care: A Growing Need research and in-depth analysis of information, we provide you with a pulse of the market. Our
for the Nation 3 articles this month uncover trends in the industry and supply you with hard, actionable
information.
An Insight on Workforce
Keywords via Web Analytics & We start this edition by forecasting national temporary wages to give you our DCR Nation-
Social Media 8 al Temp Wage Index. We also delve deeper into the numbers to examine the correlation of
temporary employment with unemployment rates. Keep an eye out for the special case
Managing and Supporting Cancer study that highlights how small businesses are succeeding without a traditional permanent
Survivors at the Workplace 12 workforce.

Temp Growth vs. Long-Term With the Affordable Care Act set to go into effect in 2014, many employers are starting to take
Economy Growth: Is it in Sync? 13 a closer look at their healthcare programs, benefits, and workforce composition. With that in
mind, we focused our analysis this month on nationwide population trends and the impact they
have on companies. Our first article in this genre concentrates on the growing need for elderly
care and the effect it has on employers. Be sure to look for our detailed analysis on the trends
in eldercare. We follow this with a short piece on the management and support of cancer
survivors in the workplace.

The next article examines the usage of web searches and social media through keywords. We
conduct thorough research on tags, keywords and keyword phrases related to workforce and
contingent staff management to predict trends in 2013 and 2014.

“
Our final piece this month examines the impact that the surge of contingent workers has on
long-term economic growth. We pay particular attention to the paradigm shift in workforce
models and on what is becoming the ‘new normal’.
“There’s been a really
fundamental shift in the
nature of employment – it’s a
sea change. Whether you’re

“
talking about the expanded
use of short-term employees,
temporary workers, project
workers, contractors or on-call
workers, the use of workers
who don’t have regular jobs
has increased a lot.”

~Katherine Stone, law
Ammu Warrier
Ammu Warrier, President

professor at University of
California, Los Angeles, and
labor specialist.

Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1

DCR National Temp Wage Index
From August 2012 to January 2013, actual temp wages continued to increase. We forecast that this upward trend will
continue until April, when we might see a drop in national temp wages.

This increase in the forecasted wage rate seems to be influenced by the 1.91% rise in the penetration rate of temporary
workers in February (compared with the rate in January of 1.90%).

The United States temporary help services industry added 16,000 jobs in February 2013 for a total of almost 2.9 million jobs.
Arrays Correlation

Temporary Employment vs. -0.71
National Unemployment Rate
Temporary Employment vs. -0.71
High School Unemployment Rate
Temporary Employment vs. Bachelor -0.69
Degree Unemployment Rate Correlation

Case Study: Business Gain Without Full-Time Employees
Xan Hood, a startup entrepreneur who founded the clothing company Buffalo Jackson, saves $270k without any permanent
employees in his organization. This is a perfect example of how small businesses can be successful in the use of temporary
workers. Relying on freelancers saves Mr. Hood time and money in various ways. For example, utilizing temporary workers
means that there is less government paperwork. This is a huge benefit, especially for a startup that often is short of funding.

Some business owners are starting to use online platforms, like Buffalo Jackson did with Elance, where they have the
ability to find freelancers who submit bids for jobs. Alternatively, many other organizations source their temporary workforce
through staffing companies who provide the benefit of professional handling of requirements, especially candidate screening,
Zonboarding and payroll administration.

Temporary Employment has always been negatively correlated with the National Unemployment Rate, High School
Unemployment Rate, and Bachelor Degree Unemployment Rate.

This is a clear indication of the significant tie of temporary job creation with unemployment figures.

Elderly Care: A Growing Need for the Nation

The United States is getting older. The combined factors of a growing elderly population, a lower projected level of birth and
net international migration are causes for concern. This trend is not only alarming for the nation, but also becomes a matter
of significance to employers who continue losing worker productivity due to time taken off to care for aging parents.

There are currently nearly 10 million adults responsible for the care of an aging parent. This aging group has increased
significantly over the past 15 years, and as per our calculation and most recent data available, currently 13.28% of the total
United States population is above 65 years of age.

Out of the total social security paid benefits of 44.79 million above 62 years of age, 22.04 million belongs to the age group of
70-80, 17.33 million are in the age range of 62-69 and 5.43 million are more than 85 years of age.

Similarly, with social security payouts, the age group of 62-70 accounts for $13.51 billion, the age group of 70-80 accounts for
$14.64 billion, and the age group over 80 accounts for $9.52 billion.

This data makes it obvious that the maximum number of aging parents requiring care is in the age group of 70 to 80.
Gail Hunt, president and CEO of the National Alliance for Caregiving, says that companies are incurring a cost of up to $34
billion a year due to caregiver absenteeism and other issues directly affecting worker productivity.

Breaking Down Elderly Caregiving
To further investigate this issue, we attempted to analyze the aging population and caregiving population by various
segments. After some careful examination on different population breakups, we discovered some interesting facts:

1. Females contribute more time than men to elderly care


2. Full-time working employees contribute more time to elderly care than part-time employees

3. The age group contributing most to elderly care is that of 45 to 54 years

4. White and Black women scored higher than Hispanic and Latino women in percentage of caregiving


5. Those workers with higher qualifications contribute more to elderly carecentage of caregiving

6. States with the highest population of 65+ age of male employees

7. States with the highest population of 65+ age of female employees



8. Female aged population by state

(Source: Aging
Integrated
Database)

9. Male aged population by state

(Source: Aging
Integrated
Database)


From the Baby Boomer’s Perspective
The oldest among the Baby Boomers entered into retirement in 2011, and the youngest will retire in 2029. The current
population of the Baby Boomer generation is 76.4 million, which is approximately 25% of the total U.S. population.

Thus, by 2030 America will have a large population of elderly people ranging from 65 to 84 Years. This huge population will
definitely require increased attention to elderly care.

As per a survey by NHANES (National Health and Nutrition Examination Survey), only 13.2% of boomers rated their own health
as “excellent”, compared with 32% of those in older generations. Nearly 7% of boomers were using a “walking assist device”,
13.5% had a functional limitation of some kind and 13.8% were limited at work. For the previous generation, those figures were
only 3.3%, 8.8% and 10.1% respectively.

As such, this large population who compared to their predecessors have lower overall health (including increased rates of
obesity, hypertension, diabetes, and hypercholesterolemia) will most likely require increased intensive elderly care, resulting in
higher health care costs and time.

From the Employer’s Perspective
As per a 2011 survey of employers by the Society for Human Resource Management (SHRM), the percentage of employers
offering eldercare programs dropped from 22% in 2007 to 9% in 2011. Similarly, access to eldercare back-up services also
reduced from 4% to 2%. Fewer benefits were offered to employee caregivers, with most leave benefits consisting of unpaid
family leave and FMLA leave.

Meanwhile, many employees are concerned about revealing family issues in the workplace, and claimed to not need the
services that were offered.

However, the few employers who have implemented some form of an eldercare program n their organization reported
significant direct benefits including:
• Reduction in absenteeism
• Retention of employees
• Inclusive culture with the sense of family being part of the company
• Work-life balance
• Improved productivity
• Reduction of the stress of caregiving


An Insight on Workforce Keywords via Web Analytics & Social Media

Top 10 Likes/Comments for “Workforce” Tag on Facebook (as on 3/6/2013)

The above graph shows those entities with the word “workforce” tagged who have received the most likes and
comments over the past year. Traditionally, changes in employment metrics and sentiment are reflected in
social media. The growth for some, such as the Workforce Fairness Institute and the Singapore Workforce
Development Agency, is substantial which indicates that interest in “workforce” has increased, especially as
unemployment decreased after August of 2012.

USA Jobs: Total Likes by Keyword Phrases

With the decline in the unemployment rate over the last few months and the improvement in the job market,
workforce companies are again catching the attention of companies as seen in social media.



Google Search on Keywords “Hiring” & “Contingent” from March 2012-March 2013
Note: The number 100 represents the peak search volume

(Source: Google Trends)
hiring contingent

Regional Interest for Keyword “Hiring”

California, Nevada, Arizona,
Texas, Mississippi, Georgia,
Florida, Illinois, Michigan,
North Carolina are among
the top states in web search
frequency.


Regional Interest for Keyword “Contingent” Nevada, Illinois, Idaho,
Missouri, Virginia, Maryland,
New Hemisphere, and Ohio
are the top states in web
search frequency.




Web Search Interest: “Vendor Management System” & “Managed Service Provider”
(United States, 2004 – present)

hiring contingent

In the contingent workforce industry, the phrases “Vendor Management System” and “Managed Service Provider” often go
hand-in-hand, as companies seek all-around solutions for their talent management needs. This can be seen in the above
graph, where web search interest in both keyword phrases often has a parallel trend, though “Managed Service Provider”
on an average has a higher level of interest. With the increasing number of temporary jobs in the workforce today, it is useful
to keep an eye on the level of interest companies have in relevant third-party solutions and services.

Managed Service Provider The keyword phrase “Managed Service Provider” has a
higher search volume index in the USA and the UK, as
compared to the phrase “Vendor Management System”.
Related search terms similar to Managed Services in IT,
Software, Model and Outsourcing have a higher search
volume index in India, the UK, and South Africa. Whereas,
the US, Canada and Australia are at a lower search index
value.

Top news headlines reflected in the search are Market
Watch, Fox Business and Reuters.

Based upon historical trends and predictive analysis,
“Managed Service Provider” is expected to be above a
40-volume search index during most of the months in 2013,
which will decrease at the end of the year, but bounce back
(Source: Google Trends) in 2014.

Note: Search volume index shows interest of people
accessing the web. When it is high, people are increasingly
searching for that particular entity. A low search volume
index indicates that users are generally reducing their
search for that entity.



Vendor Management System New York and California are the two states
with the highest search volume index for
the keyword phrase “Vendor Management
System” in the USA.

Worldwide, India and the United States are
the only countries that have a search index
in vendor management software, system and
process.

Based upon a trend forecast and predictive
analysis, “Vendor Management System” is
expected to remain below its current level
of the volume search index during the
remainder of the year, but it might show a
steep rise during the first quarter of next year.

This means that that people will enquire and
(Source: Google Trends) search for “Vendor Management System “
online more in first quarter of 2014, indicating
a possible steep rise for the keyword phrase
next year.


Managing and Supporting Cancer Survivors at the Workplace

Cancer is no longer the taboo topic that it was in the 1950s and 1960s, when few talked about the disease. According to
2012 figures from the American Cancer Society, this illness costs employers an estimated $264 billion a year in medical
care and lost productivity. The National Business Group on Health (NBGH) asserts that cancer patients account for 10% of
employers’ medical claim costs along with a large share of long-term and short-term disability claims, yet the individuals
filing the claims only represent 1.6% of the privately insured population. Rob Finch, vice-president of the NBGH, believes
that employers must cultivate “a comprehensive approach to fighting cancer through general medical benefits, behavioral
health programs and pharmacy recommendations.” These programs, which should include employee assistance benefits,
are particularly important since 90% of working-age cancer survivors return to their jobs.

“Cancer has grown in importance to employers as the frequency of diagnosis increased.” ~Helen Darling, president
of NBGH

The Center for Disease Control and Prevention predicts that 1.7 million people will be diagnosed with cancer in the United
States this year. Almost half of this group will range in age from 19 to 64, which is the bulk age of the national workforce.
While many companies have taken active steps to deal with issues regarding discrimination, there is still a lot of progress
that can be made to manage and support cancer survivors.


Temp Growth vs. Long-Term Economy Growth: Is it in Sync?

The temporary worker population has been growing at a very rapid rate, showing an upward movement over the past few
years. Engaging this type of worker has become an increasingly viable choice for employers as they can recruit workers as
required and minimize costs associated with workforce benefits. However, how does this trend affect the macro environment
in terms of long-term economic growth, as we drift away from traditional permanent jobs? In this article, we examine the
historic shift away from the kind of long-term employment that fueled the rise of the American middle class.

A stable and reliable job usually gives security and strength to employees, enabling the middle-class population to remain a
part of the long-term economic state, which in turn reinforces the economy due to the consistent source of investment. But
this model is changing with the rise of the temp economy. Job search company CareerBuilder reported recently that 40% of
employees surveyed plan to hire temporary workers in 2013 in several job categories. Of that number, 42% of those employers
say they hope to make some of these workers permanent, full-time employees. Another study by consulting firm Challenger
Gray & Christmas found that U.S.-based employers in February planned to cut 55,356 jobs (up 37% from January). Of these
21,000 are expected from the financial services industry and a large portion from both retail and aerospace and defense.

Less traditional positions and more contingent workers can lead to problems for freelance workers and society – temporary
1099 jobs often means lower wages (as compared to permanent positions) and no health care or retirement benefits. This
leads to a reduction in purchasing power and limits on personal consumption, thus slowing economic growth.

“[Temp work arrangements] can be useful to both employers and employees, but as we know it has been linked to
exploitation. The fact that temporary workers make less and have no benefits is really problematic” ~Erin Hatton,
an author and assistant professor of sociology at the State University of New York, Buffalo

Uncertainty in economic growth gives rise to the contingent workforce, and an increasing contingent workforce
without a consistent income does not contribute to economic growth. Also associated with the surge of temporary
workers is a decline in union membership and collective bargaining agreement coverage.

Temp vs. Full-Time Employment Indexes
As the chart shows, the temp help
employment almost overlaps with the
permanent employment index. This is a clear
reflection of employer preferences and that
the contingent workforce model is becoming the
new normal.

However, it seems that the model has shifted with employers clearly indicating a preference for flexible employment practices
allowing them to adjust staffing levels as competitive forces change. Companies are focusing on maximized corporate flexibility in
managing workers in a fluid workplace as opposed to providing employee stability and financial security. CEOs claim that this new
model allows for elasticity in increasing the bottom line and drives greater innovation.

“The perception has shifted. You see that with younger people who are entering the workforce. There’s a change in employee expecta-
tions of what the labor market has to offer them.” ~Katherine Stone, law professor at the University of California, Los Angeles, and labor
specialist.


Methodology
The DCR Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The
wage rates for temporary workers or contingent workforce are based on payments made by staffing firms to these
workers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and other
government sites as well as an internal pool of staffing companies and consultants, is aggregated and classified based
on regions and skill categories, to arrive at an aggregate index.

The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with
the said baseline and is representative in terms of direction and scale of change. Five years of data has been included
to observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model has
been further refined over last six months.

DCR Wage Index combines the exhaustive data from BLS with practical and more recent developments and data from
on-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionable
and objective information.

Source Data
DCR Work Index uses multiple economic variables to ensure the robustness of its forecasts and cross-validation
of trends.

Key data sources and parameters of interest included and influencing the index are:
Unemployment data
Gross Domestic Product
Prime rate of interest
New and seasonal Job openings
Non Form employment
Job Opening
All Export
All Import
Average Hourly Earnings of All Employees Total Private
Aggregate consultant data on job market parameters

References:
http://money.cnn.com/2013/02/26/smallbusiness/temp-workers/index.html
http://pagedata.appdata.com/pages/search/workforce
http://www.google.com/trends/explore#q=workforce
http://www.bls.gov/news.release/atus.t15.htm
http://www.agidnet.org/DataGlance/Pop_State/
http://www.who.int/ageing/en/
http://www.ssa.gov/oact/progdata/benefits/ra_mbc201212.html
http://www.challengergray.com/press/PressRelease.aspx?PressUid=260
https://www.census.gov/newsroom/releases/archives/population/cb12-243.html
http://www.staffingindustry.com/site/Research-Publications/Daily-News/US-adds-16-000-temp-jobs-in-February-24945


About DCR Workforce
DCR Workforce is an award winning, best-in-class service provider for contingent workforce and services
procurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMS
and MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time control, high
performance and decision-enabling business intelligence.

DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greater
efficiencies; spend control, improved workforce quality and 100% compliance with our services.

For more information about DCR Workforce and its Forecasting Toolkit (Rate, Demand, Supply and Intelligence)
including Best Practice Portal, visit dcrworkforce.com

For more information call +1-888-DCR-4VMS or visit www.dcrworkforce.com

Public Relations:
Debra Bergevine
508-380-4039
7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487
debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | marketing@dcrworkforce.com

www.dcrworkforce.com | blog.dcrworkforce.com

facebook.com/DCRWorkforce linkedin.com/company/dcr-workforce twitter.com/DCRWorkforce

© 2012 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO — 082912


DCR Workforce April 2013 Trendline Report

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